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What are Surety Bonds?

What are Surety Bonds

Posted 8 years ago by Detroit Bail Bonds

If you have found yourself in the unfortunate situation of needing money to be bonded out of jail, you might have questions about where to get the money. Even more so, you might not understand the complicated legal process and the best options for getting the bond. If you use a bail bond company, several options are possible depending upon your circumstances, including surety bonds. So what are surety bonds? And how do surety bonds compare with the other types of bonds? Let’s break it down.

What are Bail Bonds?

A bail bond is defined as a written promise signed by a defendant or a surety (one who promises to act in place of another) to pay an amount fixed by a court should the defendant named in the document fail to appear in court for the designated criminal proceeding at the date and time specified.

Generally, any person can post his or her own bond. If the defendant can’t afford to bond himself or herself out of jail, any other person age 18 or older can post the bond.

Most defendants are financially unable to post their own bail, so they seek help from a bail agent, who, for a fee of about 10 to 20 percent, posts bail.

The bail bond may vary from individual to individual depending upon the severity of the crime, the personal history of the offender, his or her mental condition, prior convictions, and his or her risk of flight. Two types of bail bonds are cash bonds and surety bonds.

What are Surety Bonds?

While cash bonds are somewhat self-explanatory, you might be wondering, “What are surety bonds?”

In the case of surety bonds, the bail amount is posted by the bail bond company after an agreement is reached between the accused and the company. Here, the liability of ensuring that the accused attends the hearing lies with the bond company, and they charge a service fee and a collateral for the bond amount from the accused.

Generally, three people or parties are involved in surety bonds: The principal is the defendant; the obligee is the government or arresting agency; and the surety is the bondsman. If the defendant skips, the bounty hunter becomes the surety.

If the defendant’s bond is set at $10,000, for example, and the percentage is set at 10 percent, he or she will have to pay the bondsman $1,000 up front. This $1,000 is non-refundable. The bondsman or the surety company covers the remainder of the bond.

Often, a defendant will have to contact a friend or family member to help with the deposit, and that friend or family member is known as the cosigner. In many cases where the bail is a high bail, or if the defendant is likely to skip, the bondsman will require the cosigner to secure the surety with property. The cosigner’s home is generally used; a lien would be placed on the home, and if the defendant skips, the bondsman may begin foreclosure proceedings.

Differences Between a Surety Bond and Cash Bond

The biggest difference between a surety and cash bond is that a surety bond involves three parties, while a cash bond involves only two parties.

With a cash bail bond, the defendant or family member or friend pays the entire amount in cash to the court or jail. When the defendant shows up for court, the person who paid the full amount gets it back.

With a surety bond, the defendant hires the surety company to pay the bail money. In exchange for putting up the full amount, the surety company charges a fee to the defendant, generally about 10 percent. When the defendant shows up for court, the bail company gets the $10,000 back from the courts, and the defendant gets some portion of the 10 percent payment back, less any fees charged by the bonding company.

Court fees may apply in all cases as well.

Surety bonds do not only apply to defendants in the legal system, however. The U.S. Small Business Administration defines a surety bond as a document signed by a contractor and a surety company that assures the project owner the contract will be completed. Contractors obtain surety bonds from surety companies or agents representing surety companies. Most public construction contracts and many private contracts require one, so construction or service contractors bidding on projects will probably need surety bonds.

Aside from cash or surety bonds, what are other possibilities?

If cash bonds or surety bonds are not ideal for your situation, other possibilities are unsecured bonds, secured bonds, federal bonds, property bonds and immigration bonds.

Consult your bail bond agent or attorney to determine the best route in your case.

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